Legal Question in Wills and Trusts in Wisconsin

I will try to hit the highpoints of your issues. The questions you pose would take an hour conference to answer completely.

Elderly parents may need substantial medical care and end up using up most of their estates obtaining such care. Once assets are gone, such persons qualify for government provided benefits. Protection of assets, while keeping them able to qualify for such benefits may be a priority in their planning. That is a discussion which needs to take place.

On the surface, your parents selling you the 40 acres for $1 creates a gift of the difference between the fair market value and the price. That would probably not create any tax, but there are both federal and state considerations (since you live in Illinois, whether Illinois has a gift tax would have to be checked). Either way, a considerable downside is that if you sell the property, your basis would only be the basis your parents had. To get a stepped up basis, you would have to inherit the property. But that means the property would become subject to the risk of losing it to cover your parents' medical costs, should they ever need to get benefits. As you can see, these are complicated issues and there is some trade off and planning that must be done to optimize things.

So much will depend on things like the health of your parents, the types of things that have historically taken others in their families, whether others have had long nursing home stays before dying, and the like. I'd suggest you contact a good elderlaw and estate planning attorney to answer your questions and provide the right advice. If you need help, we have several who could do so.

Thanks for your questions.